Pendrell Launches, Natura Sells Another Asset 💰

Welcome back to This Week in CPG, folks. Here’s what we’re covering this morning:

• TWE buys DAOU Vineyards 🍷

• Alo Yoga seeks $10B valuation 📈

• Brynwood raises ninth fund 🪙

• SKIMS x NBA 🏀

• Phoebe Philo returns 🔙

Shout-out to our partner Rivo.

Pendrell Launches 🆕

Pendrell, a clean skincare brand that’s entirely focused on skin hydration and radiance, officially launched yesterday with a five product skincare ritual. Pendrell’s lineup includes two serums, a moisturizer, a hydrating mask, and a lip balm. The products are free of parabens, phthalates, sulfates, and synthetic fragrances. 

Pendrell was founded by Chase Larabee who previously launched and sold an aeronautics startup. Larabee is so bullish on Pendrell’s value proposition that he’s giving away an awful lot of it for free. More than $750,000 to be precise. 

In short, the first six thousand customers to reserve Pendrell’s Ritual Bundle will get it for free. Customers only have to pay $16 for shipping and handling, and the bundle, which typically retails for $130, will be shipped to them. 

While giving away more than $750K worth of product might seem wacky, Pendrell is betting that consumers will come back for their high quality, clean label, and affordable products. It’s an audacious strategy, but one that cuts through the noise and could pay off considerably down the line. I’m excited to see how it plays out. 

If you’re interested in trying Pendrell, you can still secure your Ritual Bundle for free.

Natura Sells Another Asset 💰

Brazilian cosmetics firm Natura &Co reportedly reached an agreement to sell The Body Shop to Aurelius Group, a London-based private equity firm. Terms of the transaction are still being negotiated and likely won’t be publicized for some time. 

Natura &Co originally purchased The Body Shop from L’Oréal in 2017 for €1B. The once thriving cosmetics retailer has largely been on a downward trajectory since Natura &Co scooped it up for ten figures, though. 

The Body Shop still boasts a network of more than 2,500 stores across 80 countries, but revenue has steadily declined as consumers abandoned malls and cooler, more digitally-native brands whittled away at their relevance. During the last two fiscal quarters, sales at The Body Shop were down 9.4% and 12%, respectively. 

Despite declining sales, The Body Shop could be a pretty decent asset in the right hands. They have distribution sorted — 2,500 stores in 80 countries is nothing to scoff at — and it’s a brand that’s trusted by certain (older) generations. 

The problem with The Body Shop under Natura &Co seems to be one of focus. While trying to keep The Body Shop on track, Natura &Co was also managing two direct-selling beauty brands — Avon and Natura — while also managing a fast-growing luxury personal care brand in Aesop. 

Since Aesop is no longer a distraction for Natura &Co — they sold it to L’Oreal for $2.5B earlier this year — it appears that they concluded that The Body Shop would be better off under new management, too. 

With Aesop and The Body Shop both under new ownership, Natura &Co will only own Avon and their namesake beauty brand, Natura, along with a cash pile of nearly $3B. The most interesting question is what will Natura &Co do with this cash pile? Obviously they could distribute the cash to shareholders in the form of dividends, or perhaps even drive up their share price via share buybacks. But I hope they use the cash to go on an acquisition spree. Dividends and share buybacks are both short-term fixes — especially with their brand portfolio being as depleted as it is — but using the cash to buy and scale various beauty brands could lead to a renaissance for Natura &Co.

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Deals 💰

Mergers & Acquisitions 

• Treasury Wine Estates (TWE), the Australian wine firm that owns Penfolds and 19 Crimes, will spend $900M to acquire DAOU Vineyards, a California-based luxury wine producer. DAOU is the fastest-growing luxury wine brand in the U.S. over the past two years. TWE is eager to expand its luxury portfolio, and DAOU does just that while adding over $20M of EBIT in the second half of next year. Reuters 

• UK-based healthy breakfast brand FUEL10K was acquired for £34M by Premier Foods, a publicly traded food producer. FUEL10K is best known for their high protein and high fiber granola, porridge, pancakes, and oat bars. FoodBev

• Veganz, a Berlin-based producer of vegan food products that retail across Europe, purchased vegan cheese brand Happy Cheeze. Veganz will now own their production facility in Lower Saxony, too. Just Food

Fundraising

• Popular athleisure brand Alo Yoga is exploring a potential investment that could value the company at $10B. Alo has been making some big moves this year. Last week they pushed into luxury with the introduction of Alo Atelier, and in August they expanded into nutritional supplements. Business of Fashion

• Brynwood Partners, a consumer-focused private equity firm, closed $750M for its ninth fund. While Brynwood Partners used to acquire branded manufacturers like Demet’s and Back to Nature, they now tend to only acquire food & beverage manufacturers. PR Newswire

What’s New 🤩

Apparel, Cosmetics, and Wellness

• TWOOBS, a sustainable Australian footwear brand, opened their first-ever retail store which is located in Byron Bay, New South Sales. It’s a beautiful space IMO. Also their products are just extremely fun 🔽 TWOOBS

• SKIMS has been named the official underwear partner of the NBA, WNBA, and USA Basketball. SKIMS only launched into menswear last week so this partnership with the NBA feels like a major coup. NBA ratings might be struggling, but its participants are still important cultural tastemakers. PR Newswire

• The former Creative Director of Celine, Phoebe Philo, unveiled the first collection of her eponymous new fashion label. Dubbed A1 Edit, the new collection features leather coats, loafers, tees, sunglasses, etc. Despite selling £700 leggings and £800 t-shirts, the website crashed soon after launching. The return of Phoebe Philo seems to have been a success 🔽 The Guardian

Food, Beverage, and Alcohol

• Star NFL athlete and Taylor Swift’s beau Travis Kelce launched a new line of refrigerated entrees called Travis Kelce’s Kitchen. The seven product lineup was produced with Golden West Food Group and will be available exclusively at Walmart. PR Newswire

• Austin-based Wonderkind Co. did a terrific job designing the packaging for The Real Cereal Co. The blue and white stripes plus nostalgic font really does the trick 🔽 The Dieline

• Pernod Ricard-owned Altos Tequila has pushed into the flavored tequila category with two new products. The flavored spirits space, especially flavored whiskey and tequila, is getting very crowded. The Spirits Business

• Boulder-based Mortal Kombucha launched a new flavor, Peaches Be Crazy, exclusively at Sprouts Farmers Market. Love their new aluminum bottles. Instagram

• Mom’s Spaghetti, the pasta sauce brand founded by iconic rapper Eminem, is shipping nationwide after launching late last week. Eminem opened Mom’s Spaghetti in Detroit in 2021 but this is their first CPG product. Good-looking jar 🔽 Hypebeast

Data 🖥️

• Celsius Energy is not slowing down. Volume for the four weeks ending on October 7th shot up 140.8%. Monster. Twitter

Distribution News 🚚

• Australian skincare brand TBH launched at over 850 Coles stores.